Worldwide: Challenges And Opportunities In Agriculture In Africa

Last Updated: 27 July 2015
Article by Raj Kulasingam, Jeremy Cape and Nicholas Plant

Some thoughts on unlocking the potential of the agriculture sector in Africa.

This month I thought I would turn to the agriculture sector in Africa. This came off the back of my colleague, Jeremy Cape, and I travelling to Kyiv, Ukraine (yes Kyiv) to talk to some Ukrainian clients who want to access the African agriculture market.

Ukraine is the breadbasket of Europe. And, as the plane descends into Kyiv airport, you can see vast expanses of cultivated farmland with closely packed crops. This is a very different view to what you get when flying over most African agricultural land, where the cultivation levels are low and fields look a lot less dense. (By the way, if any reader in West Africa is interested in importing chicken from the Ukraine, I know a man who needs a local agent/partner.)

Some of the content below is based on presentations given to the Ukraine Agriculture Forum and a round table discussion at our Kyiv office.

Live Aid was 30 years ago

13 July, 2015 will be the 30th anniversary of Live Aid. (I will do some reminiscing with some friends on that day - seems like a lifetime ago.) For those of you too young to know/remember, Live Aid was a seminal dual-venue (London and Philadelphia) concert held on 13 July 1985. It was organised by Bob Geldof (of the Boomtown Rats – best known for their hit single "I don't like Mondays") and Midge Ure (of Ultravox – remember "Vienna"?) to raise funds in aid of the Ethiopian famine.

The images of millions of people starving in Ethiopia that were the catalyst for that concert are etched on my brain. The concert itself was fantastic (to an avid music lover) and one of my great regrets was that I watched it on TV in my living room in Kuala Lumpur instead of being there live at the Wembley or the Kennedy Stadium.

Ethiopia has come a long way since then with the IMF ranking Ethiopia as among the five fastest-growing economies in the world – with average GDP growth rate of more than 10 per cent per annum with a 10.3 per cent growth rate in 2013/14.

Food – the crisis today

Whilst Ethiopia is no longer faced with famine, the number of African countries facing severe food shortages has doubled over the past two decades. The United Nations reports that the factors that have contributed to this include extreme weather conditions, natural disasters and insurgencies.

According to the UN, as many as 24 countries are contending with food crises across sub-Saharan Africa. Nearly 240 million people in sub-Saharan Africa, or one person in every four, lack adequate food for a healthy and active life. And record food prices and drought are pushing more people into poverty and hunger.

These problems are only going to get worse as the upward trajectory of urbanisation casts its shadow across most of Africa, which will require more food to be transported and distributed within cities, increase demand for water and also increase demand for agricultural and food products.

The demand for food staples is predicted to double by 2020 as urban populations grow by 4 per cent each year. Much of that growth is made up of low-income earners who spend the majority of their pay on basic food items.

Africa is a net importer of food

Today, Africa does not grow enough food to feed its own population and African countries have tended to satisfy increasing demand through more expensive imports from the global market. The agriculture sector in many African countries is in a parlous state. It's a situation primed for hunger and unrest.

It is stating the bleeding obvious that the solution to the food crisis in Africa is for Africa to grow more food locally. However, Africa has the ability to grow enough food not only to feed itself, but also to help solve the worldwide food deficit.

The good news

Many African countries have the advantages of fertile soil and the possibility of year-round farming and more than one harvest per year. This, together with the fact that a successful agriculture sector can have a multiplicator effect and the potential to create significant employment and transform a country's economic fortunes, is seeing African governments actively promoting the agricultural sector.

What role can agriculture play in Africa's economic transformation?

Agricultural growth doesn't only benefit the people in rural areas and farmers. It also benefits the rest of the economy and creates employment for large numbers of people, thereby curbing youth unrest, and the pull factors that result in high rates of urbanisation.

In many developing countries, the money that goes into the pockets of consumers comes primarily from agriculture. This, in turn, produces the wealth to sustain local manufacturing and the purchase of local produce as well as stimulate export growth.

Agriculture can be the "cow" that feeds the people in the early decades of a country's economic development. As agricultural output increases, there will be associated benefits, including opportunities for the manufacturer and marketing of products such as fertilisers, pesticides and seeds as well as a demand for food processing services such as grain refining.

The opportunity and the potential

Yet the problem of food supply in Africa is also the reason the folks in Kyiv were interested in African agriculture and why there are growing numbers of companies and private equity funds looking to invest in African agriculture. Some have already successfully tapped into this market (including traders like Cargill, Bunge and ETG). As always, one person's problem can be an opportunity for another and the statistics illustrate the point:

  • only 5 per cent of grain consumed in Africa comes from African farmers;
  • yields are a third or half of yields elsewhere in the world;
  • there is only one tractor per 320 people economically active in African agriculture with 3.5 million more tractors needed to put Africa on a par with other agricultural economies;
  • 79 per cent of arable land in Africa remains uncultivated;
  • annual post-harvest grain losses in sub-Saharan Africa average US$4 billion;
  • most African farmers are smallholders with no access to capital, equipment, fertiliser and good farming knowhow.

According to McKinsey, Africa is currently home to 60 per cent of the world's total uncultivated, arable land. That's the opportunity.

The not so good news – what's holding back the African agriculture sector?

Developing an agroeconomy (yes there is such a word) in most African countries requires improvement in education, infrastructure, power, access to markets, irrigation, seed, fertiliser, farming practice, land husbandry, mechanisation, finance, modernisation, technology, smallholders and getting more land into production. These seem like an intractable number of issues with finance being absolutely key (but to be covered on another day). So where do you start?

Africa can help feed Africa

In its 2012 report, "Africa Can Help Feed Africa", the World Bank looked at how the continent can prevent food shortages and unlock its massive agricultural potential. The basic premise is that regions in Africa have natural food surpluses in certain staples and deficits in others; the key is to maximise output and get the food to where it's needed. The attempts at national self-sufficiency have not worked.

It's an interesting (if long) read and has many recommendations. I would focus on a few key points below: 

Remove trade barriers: Trade barriers deny African farmers access to higher yielding seeds and better fertilizers available elsewhere in the world. For example, in some African countries, it can take two to three years for new seed varieties to be authorised/released, even if they are used elsewhere on the continent. As new varieties are introduced at a faster rate, Africa falls farther and farther behind in the use of modern seeds making it difficult to compete with imports from the global market.

Governments should remove trade barriers which will open up cross-border trade within Africa, increase Africa's potential food production, increase food security by improving access to food, and raise returns for small-scale farmers. It will also provide benefits to farmers, consumers and governments as farmers will make more money from meeting the rising demand and consumers will get cheaper access to food and other benefits such as jobs from a growing agricultural sector. Meanwhile, governments will be better able to deal with food security.

Deliver modern and competitive transport services: Regulatory reform that delivers more modern and competitive transport services is required. High transport costs and the lack of investment in modern trucking and shipping capacity limit the movement of surplus food to areas of strong demand. Transport infrastructure needs improvement – especially on cross-border routes and in linking smallholders to regional networks. Roads are not the major constraint (not sure I agree with this based on the roads I have been on).

Remove regulatory barriers: Regulatory barriers to trade and competition along the whole value chain must be removed. Among the factors affecting Africa's trade in staples are export and import bans, variable import tariffs and quotas, restrictive rules of origin, and price controls.

These are often determined without transparency, and are poorly communicated to traders and officials at the border. This creates uncertainty about market conditions, limits cross-border trade, and raises food price volatility. The way that standards are defined and implemented has a critical impact on the propensity to trade.

Make border crossings easier and safer: Reducing the number of agencies and officials at the borders and increasing the transparency and predictability of the policy regime is crucial to providing an environment in which traders flourish and expand their businesses.

Hundreds of thousands of Africans cross borders daily to deliver food staples from surplus areas to higher-priced markets. Most of these traders are women, and their activities provide an essential source of income to many households. But most border officials are men, and studies show that cross-border traders regularly suffer some sort of harassment. For example, in the Great Lakes region, poor women cross-border traders must routinely pay bribes, and a large number of them relate acts of violence, threats, and sexual harassment, most of which go unreported.

The lack of economic and physical security undermines the livelihoods of these traders and compounds their lack of access to finance, information and business knowledge.

Role of technology

No industry today can ignore the role that technology can play. There are all sorts of equipment and systems that can be used to drive efficiency, production and greater yields. The key here is to make sure that the chosen technology is suitable (ideally, proven to work on the ground) for the local environment. Issues like access to spare parts and support locally become critical the more remote the location of use is.

Africa's next millionaires/billionaires?

A few years ago I met a very polished gentleman called Akinwumi Adesina. Since then, he has been credited with helping to reform the Nigerian agriculture sector (named Forbes African of the Year 2013 for his reforms) and was recently elected as president of the African Development Bank. Signing off with a quote from him:

"Africa's future billionaires and millionaires will make their money from agriculture."

This is a sector that needs investment and can be the catalyst for growth and if some people get rich in the process, why not!

This article was first published in the July 2015 edition of Financial Nigeria magazine, a monthly development and finance journal. For subscription, please complete online subscription form at

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
28 Sep 2017, Seminar, London, UK

On 26 July the FCA published its long-expected consultation paper on the extension of the SMCR to all FCA-authorised firms. The so-called "core regime" introduces the key concepts of regulator-approved senior managers, firm-approved certification staff and conduct rules applicable to virtually all staff.

3 Oct 2017, Conference, Zurich, Switzerland

As the founding Partner of the Europe-Iran Forum, Dentons Europe will once again support this year’s event. This compelling event which explores all Iran-related topics will take place in Zürich on 3rd and 4th October.

4 Oct 2017, Workshop, London, UK

We are hosting an interactive workshop where we will run a mock High Court trial of an employee competition case – where the members of the audience are the judges. The session, aimed at in-house counsel and HR professionals, will offer an insight as to how disputes involving employees moving to a competitor play out in practice.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.